Certificate IV in Accounting / Certificate IV in Bookkeeping Assignment -
Aims of this assessment - This assessment focuses on the skills and knowledge required to maintain business taxation accounting records and process lodgements as well as other returns in accordance with Australian Taxation Office (ATO) requirements. The material covered apply to individuals who, within their level of authority, apply specialised knowledge and follow defined procedures to administer and process information.
Assessment Activities - Short answer, preparation and calculation
Identify, describe, analyse and prepare reporting
Question 1 -
Ben and Jerry have formed a partnership to operate a small cleaning business which trades under the name of 'Super Clean'.
The partnership accounts are prepared on an accrual basis with the financial year from 1 July to 30 June.
They expect to have business income in excess of $75,000 (excludes GST) for the year.
The partnership holds a small inventory of cleaning materials and products.
They employ three employees and, as employers, the partnership meets all its obligations in regard to superannuation, withholding of tax, etc.
a. Does the partnership need to apply for a Tax File Number? (Explain your answer with reasons).
b. Does the partnership need to register for GST? (Explain your answer with reasons).
c. Does the partnership need to apply for an Australian Business Number (ABN)? (Explain your answer with reasons).
d. Is Super Clean a reporting entity or a non-reporting entity? (Explain your answer with reasons).
e. Explain what information would be provided in each of the following reports for Super Clean:
i. Income Statement
ii. Balance Sheet
iii. Statement of Cash Flows
Question 2 -
The following information applies to the business of D. Benches, for the year ended 30 June 2017. GST is collected on all sales and GST is paid on all purchases.
Required: Using the information provided, reconstruct the following, providing any missing information and prepare the:
- Accounts Receivable account,
- Accounts Payable account,
- Purchases account and
- Trading Account to determine Gross Profit (Loss).
Information available to you:
|
Account
|
1/7/2016
|
30/6/2017
|
|
Inventory (excl. GST)
|
$1,800
|
$2,100
|
|
Accounts Receivable (incl. GST)
|
3,800
|
5,590
|
|
Accounts Payable (incl. GST)
|
9,000
|
8,150
|
|
Other Details
|
|
Cash Received from Accounts Receivable during year
|
$30,000
|
|
Discounts Allowed to Accounts Receivable incl. GST
|
660
|
|
Cash paid to Accounts Payable during year
|
19,000
|
|
Discounts Received (for prompt payment of creditors) incl. GST
|
1,100
|
|
Returns (of purchases) to Accounts Payable incl. GST
|
220
|
|
Freight inwards paid (on inventories) incl. GST
|
110
|
|
Bad debts written off incl. GST
|
550
|
Use the following T-account formats for your reconstructions (show your postings and balances):
Question 3 -
Effective from 1 July, 2017, Wilma and Betty, both sole traders, decided to join their businesses together and form a partnership to be known as 'Flintstone Trading'.
Wilma brought the following to the partnership:
|
Cash
|
$66,000
|
|
Machinery
|
62,000
|
|
Office Equipment
|
12,000
|
|
Accounts Receivable
|
24,000
|
|
Accounts Payable
|
14,000
|
Betty brought the following to the partnership:
|
Cash
|
$32,000
|
|
Motor Vehicles
|
88,000
|
|
Land & Buildings
|
250,000
|
|
Mortgage on Land & Buildings
|
120,000
|
Wishing to further expand their business, on 31 December 2017, Betty and Wilma purchased a business from Barney for a consideration of $90,000 and acquired the following assets and liabilities:
|
Inventory
|
$25,000
|
|
Accounts Receivable (full value $35,000)
|
32,000
|
|
Motor Vehicle
|
37,000
|
|
Accounts Payable
|
8,000
|
Under the deal, Barney does not become a partner in their business and he was paid, in full, on 10 January 2018.
Required:
(a) General Journal entries:
i. To record the partnership formation.
ii. To record the acquisition of the business from Barney.
iii. To record the actual payment of the purchase consideration to Barney.
(b) Calculate the profit sharing ratio at 31 December 2017 for Wilma and Betty, based on their respective capital contributions. (Show your workings).
Question 4 -
Bart and Lisa are in partnership, sharing profits in the ratio 3:2. They provide you with the following information at 30 June 2017.
|
Fixed Capital - Bart
|
$120,000
|
|
Fixed Capital - Lisa
|
100,000
|
|
Current Account - Bart (Balance b/d 1/7/2016)
|
2,400 CR
|
|
Current Account - Lisa (Balance b/d 1/7/2016)
|
12,600 CR
|
|
Drawings for the year - Bart
|
20,000
|
|
Drawings for the year - Lisa
|
15,000
|
|
Loan from Lisa for the year
|
50,000
|
|
Net Profit (before relevant P&L account adjustments - see below)
|
87,250
|
Their partnership agreement provides for the following:
- Interest on fixed capital is 12% p.a.
- Interest on drawings is 3.5% p.a.
- Interest on loan to partnership 10% p.a.
- An annual salary of $30,000 which is not paid in cash is to be accrued to Lisa.
Required: Prepare the General ledger accounts (in T-account format) as at 30 June 2017 for:
(a) Profit & Loss
(b) Profit & Loss Appropriation
(c) Current Account - Bart
(d) Current Account - Lisa
Question 5 -
The following information relates to Tamworth Flour Mills for the year ending 30 June 2017.
|
Allowance (provision) for bad debts
|
$1,500
|
|
Cash sales
|
77,000
|
|
Cash received from Accounts Receivable
|
253,000
|
|
Cash paid to Accounts payable
|
154,000
|
|
Money borrowed (for operations) from Colony Bank
|
25,000
|
|
Cash received, including 10% GST, from sale of milling machine
|
94,160
|
|
Cash paid, including 10% GST, for the purchase of new milling machine
|
127,457
|
|
Interest received
|
10,920
|
|
Interest payments on Colony Bank loan (for operations)
|
2,400
|
|
Wages paid
|
42,760
|
|
Cash payments for other expenses
|
66,000
|
|
Cash paid, including 10% GST, for a new computer hardware
|
29,073
|
|
Additional cash introduced by owners
|
50,000
|
|
GST Paid to ATO
|
16,000
|
|
Repayment of loan (for operations) to ABC Finance
|
10,000
|
|
Interest paid on ABC Finance loan (for operations)
|
700
|
|
Cash at Bank as at 1 July 2016
|
8,800
|
Required: Prepare the Statement of Cash Flows for the year ended 30 June 2017.
Question 6 -
The following information relates to the Cooma Birdwatchers Club. The Club is not registered for GST.
|
|
30/6/16
|
30/6/17
|
|
Stock of liquor
|
$1,600
|
$2,300
|
|
Subscriptions in Advance
|
3,100
|
1,900
|
|
Subscriptions in Arrears
|
1,700
|
1,100
|
Information from the Cashbook for the year ending 30 June 2017 is:
|
Receipts
|
Payments
|
|
Annual subscriptions received
|
$42,850
|
Bar - staff wages
|
$9,420
|
|
Bar sales
|
78,780
|
Bar - liquor purchases
|
48,900
|
|
|
Bar - general expenses
|
600
|
|
|
Photography supplies purchased
|
1,200
|
|
|
Club manager's salary
|
12,300
|
|
|
Cleaning expenses
|
2,130
|
|
|
Rent paid
|
6,000
|
|
|
Donations
|
3,200
|
|
|
Printing of newsletters
|
1,850
|
|
|
General expenses
|
2,630
|
|
|
Sponsorship of soccer team
|
960
|
Required: Prepare the following two accounts and the Statement of Income and Expenditure:
(a) Bar Trading Account.
(b) Members' Subscriptions Account.
(c) A Statement of Income and Expenditure for the year ending 30 June 2017.
Question 7 -
The following are the summarised financial statements of Gamma Co. for the year ended 30 June.
|
Gamma Co. Balance Sheet as at 30 June
|
|
Assets:
|
Freehold Property
|
|
$50,000
|
|
|
Office Equipment (Net)
|
|
12,500
|
|
|
Accounts Receivable
|
12,000
|
|
|
|
less: Allowance for Doubtful Debts
|
500
|
11,500
|
|
|
Inventory
|
|
10,000
|
|
|
Cash at Bank
|
|
3,000
|
|
|
|
|
87,000
|
|
|
|
|
|
|
Liabilities:
|
Mortgage on Freehold
|
|
20,000
|
|
|
Accounts Payable
|
|
8,000
|
|
|
Accrued Expenses
|
|
1,000
|
|
|
|
|
|
|
Equity:
|
Capital
|
|
58,000
|
|
|
|
|
87,000
|
|
|
|
|
|
|
|
Additional Information
|
|
Capital as at beginning of year (1/7)
|
60,000
|
|
Inventory as at beginning of year (1/7)
|
12,000
|
|
|
Gamma Co. Income Statement for the year ending 30 June
|
|
Sales (thereof Cash sales $30,000; Credit sales $60,000)
|
$90,000
|
|
less: Cost of Goods Sold
|
66,000
|
|
Gross Profit
|
24,000
|
|
less: Operating Expenses
|
9,000
|
|
Net Profit
|
15,000
|
Required: For the year ended 30 June, show your workings and calculate the following ratios:
(a) Gross Profit Rate
(b) Net Profit Rate
(c) Current Ratio
(d) Liquid Ratio
Question 8 -
The following information relates to a machine purchased on 31 August 2012 by 'Snoopy Manufacturing Co.' to produce dog bowls.
Asset cost 31/8/12 - $19,680 plus GST
Estimated useful life of machine - 6 years or 250,000 units
Estimated scrap value of machine - nil
Production for year ending 30 June 2014 - 28,000 units
Production for year ending 30 June 2014 - 44,000 units
Production for year ending 30 June 2015 - 45,000 units
Required: Prepare the following depreciation worksheets for the years ended 30 June 2013, 2014 and 2015 for the machine using:
(a) Straight line depreciation method
(b) Units of production method
(c) Diminishing balance method at a rate of 27.5% per annum
Question 9 -
The Sales Manager for your business has asked you to prepare a graphical chart showing the breakdown of sales across the major product categories. She has provided you with the following figures:
|
Sales - January to December 2017
|
|
Product Category
|
Sales $
|
Sales %
|
|
Desktop computers
|
$1,250,000
|
|
|
Laptop computers
|
$850,000
|
|
|
Software
|
$100,000
|
|
|
Accessories
|
$300,000
|
|
|
Total
|
|
|
Required:
a. Calculate and fill-in the missing percentages by product category and totals information in the table (above).
b. The Sales Manager has also asked you to prepare a simple graphical chart that clearly shows the percentage proportions of sales by product category for the year.
Which chart type would you recommend to best convey this visual representation of this information?
- A line graph.
- A pie chart.
- A bullet list.
- A written list.
c. Based on your recommendation (selected above) prepare a simple graphical chart that clearly shows the percentage proportions of sales by product category for the year.
Include a chart title, labels specifying the % proportions, a legend (or labels) to identify each of the product categories.
Attachment:- Assignment File.rar